Canada's SecureKey wins U.S. grant for digital identity network

TORONTO (Reuters) - SecureKey Technologies and a Canadian non-profit coalition have received a grant from a research center funded by the U.S. Department of Homeland Security to help build a digital identity network, the Toronto-based tech company said on Tuesday.

Last fall, SecureKey raised C$27 million from six of Canada's top banks, including Royal bank of Canada <RY.TO> and Toronto-Dominion Bank <TD.TO>. Other previous investors included Intel Capital, Visa Inc <V.N> and Canadian telecom firms. The companies, along with different levels of government, have partnered to lay the groundwork for a national digital identity network they hope to launch commercially later this year.

The Digital ID and Authentication Council of Canada (DIACC), a non-profit coalition of public and private sector organizations, aims to build a national system that allows the public to access online services without memorizing dozens of passwords, or prove their identity, while still maintaining their privacy and security.

The grant for up to $800,000 from Command Control and Interoperability Center for Advanced Data Analytics (CCICADA) will help build the necessary infrastructure to make that happen, SecureKey's chief identity officer Andre Boysen said in an interview.

"In today's world, every organization acts on its own," said Boysen. "Digital identity is bigger than any one organization ... it takes a village to make digital identity work."

The company uses blockchain, the technology behind bitcoin, to create a "triple blind" privacy protocol that allow individuals to easily connect to partnering online services using an existing, trusted log in credential, while limiting the actual amount of data being transmitted for security.

Blockchain is a distributed record of transactions, or other data, maintained by a network of computers without the need for approval from a central authority. The technology makes large-scale hacking extremely difficult.

The "triple blind" mechanism means a consumer can use their bank credentials to log in, for example, and access their destination service, but the bank can not see where the data is going, and the recipient can not see which bank is used or any bank account information.

As a middleman, SecureKey is similarly "blind" and cannot see who is using the services.

"That's why DHS is interested, because now we have scalable market service with very, very good privacy and that's what we're using blockchain for. It helps us implement blinding," said Boysen.